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THQ lays off 200, shuts down 3 development teams

Wed 10 Aug 2011 7:00am GMT / 3:00am EDT / 12:00am PDT
BusinessPublishing

Drastic downsizing at publisher as it axes MX Vs ATV franchise and moves away from kids and licensed properties

Publisher THQ is to shut down three of its internal development teams, laying off 200 members of staff in the process.

Both of the company's studios in Australia are to close and its development team in Phoenix is to be eliminated, although a QA division there will continue to operate.

The company said it intends to move away from kids titles and movie-based properties and it will no longer develop the MX Vs ATV franchise.

In June the publisher closed Homefront team Kaos Studios and shuttered the UK's Warrington outfit. A month earlier it let staff go at Kaos and Saint's Row developer Volition.

"With this realignment, we are narrowing our focus to high-quality owned IP with broad appeal that can be leveraged across multiple platforms, and to work with the best talent in the industry," said Brian Farrell, CEO.

"By right-sizing our internal development capacities for our console portfolio, our five internal studios are focused on delivering high-quality games with talented teams driving the execution of those titles to market.

"As we have outlined in our business strategies, we are making shifts to reduce movie-based and licensed kids' video games in our portfolio, which underscores our strategy to move away from games that will not generate strong profits in the future."

The move comes after the publisher canned its Red Faction series due to poor sales, and was pinning digital hopes on selling the latest MX Vs ATV physical game at a discount with multiple additional DLC.

The drastic cuts leave THQ with five studios. THQ Montreal is under the leadership of Patrice Desilets and working on new IP, while Volition is busy with Saint's Row the Third and the Guillermo del Toro project Insane. Relic Entertainment is working on Warhammer 40,000: Space Marine and Darksiders II is underway at Vigil Games. THQ San Diego continues with the WWE franchise.

31 Comments

Sid
Technical Lead Programmer

4 0 0.0
Its really pathetic to see even such a big giant like THQ also laying off its staff and that too in a huge way by shutting down its development teams. I think this is only because of improper pre-sales estimation. Pre-sales and future market analysis is more important before going for a development start else the results are just like this case.

Anyway talent always finds a better way. All the best guys for a better career.

Posted:2 years ago

#1

Aleksi Ranta
Product Manager - Hardware

267 121 0.5
oh dear.

Posted:2 years ago

#2
NOt everyone can relocate from Australia. Chances are, there are enough folks to start up their own outfit now

Posted:2 years ago

#3

Mikolaj Macioszek
Translator

14 0 0.0
Good luck to all those involved.

Posted:2 years ago

#4

John Donnelly
Quality Assurance

313 38 0.1
Dam, thats bad news to read.
Best of luck to you all effected by these cuts.

Posted:2 years ago

#5
in all honesty, how grim is the outlook for the overall Australian gaming industry. I'm not sure what giants of gamin development remain in Aussieland

Posted:2 years ago

#6
Yup, the rumours I heard were right. Good luck everyone finding a new job in (or out) of the games industry :P

Australia as a game development scene has now really been decimated, compared to 3-4 years ago. Will a big publisher come in with some serious money, and start up a serious studio? There is now plenty of talent around...

Posted:2 years ago

#7
@ Michael - am I right in thinking due to the mixture of a stronger AUD, and the difficulty in completion of a strong IP, that leads to a generally negative perception of Aussie game development. Granted there is a large swathe of available talent - there are labour and future investment costs to consider such as Canada :(

Posted:2 years ago

#8

Christopher Bowen
Editor in Chief

400 523 1.3
So basically, Australia's entire scene is KMM now, who's name are now shit because they took on McNamara. Am I right on this?

THQ gambled on being a AAA company and hanging with the big boys. They lost. I shed no tears for their executives, but I flood for those who have lost their jobs due to layo-- Oh, wait. "Right sizing". Really?

Posted:2 years ago

#9

Nick Burcombe
CEO & Co Founder

53 16 0.3
Awful news for all involved....

Posted:2 years ago

#10
eesh that fucking sux

Posted:2 years ago

#11

Terence Gage
Freelance writer

1,288 120 0.1
So, THQ are copying Activision's business model in earnest, where they count on a small number of high quality games, and don't back any mid-level or non-mainstream releases?

Best wishes to all affected; the industry in Australia seems to be in even worse condition than in the UK right now. Might be a perfect time for a publisher who's still in a healthy way to set up shop in Oz.

Posted:2 years ago

#12

Edward Buffery
Pre-production Manager

148 96 0.6
That's sad news :( Let's hope their remaining studios do well, and that those laid off can find other jobs.

(Also, 'Violition'(sic) is misspelt in the final paragraph)

Posted:2 years ago

#13

Sergei Klimov
Director of Publishing & Business Development

18 0 0.0
We had wonderful experience working with Blue Tongue. Very professional.

Posted:2 years ago

#14

Steven Pick
Lead Graphic Designer

70 14 0.2
Getting horrible deja vu - Midway went through the same situation a few years back. Best of luck to those affected by these lay-offs. Horrible situation :(

Posted:2 years ago

#15

Gareth O'Neill
Environment Artist (Contract)

30 23 0.8
Was a Sad day indeed Mr. Pick :'(
I don't know about anyone else but the games industry feels like it's just crumbling all around, what with all the studios laying people off, people being undervalued and treat badly. Why do I still do it? lol

Posted:2 years ago

#16

Robley LeJeune
Developer

6 0 0.0
Don't you "love" the management word "right-sized". I hope all those people who lost their jobs can find long-term stable employment.

Posted:2 years ago

#17

Wayne Gibson
UK Marketing Manager for GameKrib.com

69 8 0.1
I think this is the result of gambling on Homefront being 'The next big FPS' and failing combined with some other IP's. A shame really.

Posted:2 years ago

#18

Luke
Managing Director

2 0 0.0
Very difficult for big publishers at the moment to shift momentum quickly once they have built big budget titles. I have lots of friends from my years at THQ and I am sure much of this talent will re-emerge.

Posted:2 years ago

#19

Sean Kauppinen
Founder & CEO

45 47 1.0
The issue is ultimately shelf space at retail. The retailers have shrunk shelf space and inventory management has changed where games don't get very long to sell through and the risk is higher on the publishers than ever before. This has killed the BBB console game market. Also, most of the publishers are starting to see a larger percentage of revenue coming from digital sales. Until there's a significant digital sales and distribution channel for traditional publishers (other than Steam) for the majors, you'll see less mid-tier games and more staff layoffs.

It sucks, but that's what's happening.

Posted:2 years ago

#20

James Leedham
Tools Programmer

1 0 0.0
They say they're making "shifts to reduce movie-based and licensed kids' video games", which "will not generate strong profits in the future." I don't entirely agree with that. Surely there's a certain reliability to kids games. They may not always sell in huge numbers, but they'll always sell, and are typically easy to market, especially movie-based games. Whereas original IP is fraught with risk. If you've done an amazing job and you pay huge sums to market it, then you *might* get lucky and have a winner. Seems odd for THQ to trash kids games if their finances aren't great...

Posted:2 years ago

#21

Andrzej Wroblewski
Localization Generalist

100 68 0.7
Examples of solutions to the problem:

- more indies (those laid off could as well organize and create their own games or find new investment sources, especially with the overall good prospects for the immediate future for our industry)

- less commercial productions -- there are still unexplored fields like "what happened with Shodan after System Shock 2" -- and production quality still needs some fresh blood... for example people who understand the difference in quality between music in Heroes of Might and Magic 3 and pieces presented for Heroes 6... ;> These people can really make the difference in AAA productions. Same goes for some new ideas which could add up to the overall "feel" of AAA games... like -- "let's finally get rid of the lunar physics, PLEASE!" ;>

Our industry suffers the same condition as music production industry. Commercialisation = marketing - quality. Of course, marketoids will always imply that they are the most important part of the process, and try to grab as much as they can off every source. My grandmother used to say: "even the worst salesman lives better than the most talented author"... I think it's time to change things here.

My point is: if a producer / publisher really wants to be successful, (s)he needs to review strategies in order to account for added value of relatively inexpensive high art.

Posted:2 years ago

#22
@DrChee: I would say a lot of this is AU dollar related, but not entirely. As one of the few countries that didn't have an economy collapse post the GFC, the cost of housing & business in general here are still pretty high - meaning salaries still are quite high. And the labour gov has prevented any softening of workplace laws, meaning its hard to fire (fulltime) people without paying out a lot.

In the case of THQ, I do believe it was really a case of strategic realignment - if the studios were reversed, the Aussie studios may well have survived. It didn't help that "De Blob II" (which was in development for YEARS) seemed to be a complete failure at retail - and I think the management at both THQ & BlueTongue have to take some of the heat for that.

At least in Victoria, we still have Firemint (EA), Tantalus & Torus (and a number of other smaller companies) - so its not all doom and gloom.

Posted:2 years ago

#23

Sam Izzo
Chief Guy

2 0 0.0
Sorry but that's wrong. de Blob II wasn't in development for years. We rolled off de Blob 1 straight onto de Blob 2, and it took about two years. That's a far cry from the the length of time big AAA titles take. We weren't aiming for a middle-tier game, so we weren't going to do a crap job. Also it was originally going to be a Wii-only title, and we had written a very optimised, Wii-specific rendering and material system which let the artists do some very nice work and really take advantage of the Wii hardware. Unfortunately (or fortunately) near the end of the project it was decided that we should also do an X360/PS3 port, so we got a bit of extra time to do that (sadly it meant that people thought the Wii version was a downport).

Also I don't know if you've ever worked for an internal, publisher-owned studio, but that's not how it works; the BTE managers don't have much say in the marketing. The game didn't review terribly (74 - 79).

Posted:2 years ago

#24

Harley Gresham
Studying Games Design

9 0 0.0
I'm honestly a little worried about the prospect of students like myself looking for a job in the Australian games industry. Personally, I'm trying to get *prepared* now, and start looking at indie development, no matter how hard that road is. Best of luck to all Blue tongue/THQ people, I really enjoyed De Blob's visual aesthetic and gameplay mechanics.

Posted:2 years ago

#25
@Sam: Hi Sam - I made the effort to buy & play the (Wii) game (esp. after I finished Blob 1, and really enjoyed it). Technically and artisitically I think the game improved significantly - but I personally found the gameplay to be less enjoyable (not going to go into the issues here). I guess what I was trying to say, THQ failed to market the game sufficiently (not to mention giving it an awful release slot) - i.e. this was their fault, not BlueTongue's. I thought BlueTongue executed well, apart from some gameplay flaws.

I can't see any reason why the programmers & artists on the project can't be very proud of what they achieved, especially pushing the Wii to its limit.

Posted:2 years ago

#26

Sam Izzo
Chief Guy

2 0 0.0
Thanks for your comments. Yeah the dev team can deliver a good game, but I guess in the end it's up to marketing to get it into people's hands!

Posted:2 years ago

#27
Unfortunately Australia is a great place with a lot of hugely talented people but the cost of running a dev there compared with other locations is prohibitive. I looked into it and couldn't make the maths work at all. It was a real shame as I would have loved to have a team there but the cost was too high. The AUD$ strength is very hard, but the overall cost when it comes to overheads as well as salaries and Superannuation etc etc made the numbers far in excess of nearly anywhere else. Quite a shame as there is a lot of talent affected purely by cost. The Canadian dollar is similarly expensive but the huge fiscal offerings by the governments more than balances that out. The weak pound helps UK businesses, but the red tape and regulation does not. So nowhere is perfect, but ultimately it comes down to money. We all have to pay our bills and if it costs more to make than we can make out of it then it is never going to happen. Good luck to all in Oz.

Posted:2 years ago

#28

Murray Lorden
Game Designer & Developer

199 72 0.4
@AndrzejWroblewski

"What DID happen to Shodan after System Shock 2?"... :) The mention of a Looking Glass game looks to have set me off on a bit of a Looking Glass spiel, as I've just been listening to a set of very cool podcast interviews with ex-Looking Glass staff...
[link url=http://gambit.mit.edu/updates/audio/looking_glass_studios_podcast/
]http://gambit.mit.edu/updates/audio/look...[/link]

Looking Glass Technologies are an interested case to bring up here... They were making excellent ground breaking games, and they STILL went under, right after shipping Thief 2, which I declare to be my favorite game of all time! So innovation, and high-art are not necessarily the goal for many studios, or publishers, for obvious reason! But I do personally value the efforts of these very innovative studios. And Looking Glass was certainly a tight knit group of like-minded innovative game developers, with a strong ideology of articulate game design goals.

There's some special about those studios and teams who focus on creating "games that they really want to play themselves!"

I think that's a paradigm that is too-often not part of the development equation around the world!
But that's just a reality of the market, I suppose.

But once Looking Glass closed, the staff spread out to other places and have played their parts in the future annals of computer game history... a few had already gone to Dreamworks a few years earlier and made Trespasser, which I still hold up to be a pretty amazing and fascinating game despite its flaws! While after the close, Greg LoPiccolo went to lead Harmonix (where Guitar Hero and Rock Band were born), while others like Randy Smith went to Ion Storm (to head up development on Thief 3, and where Deus Ex 2 was made with Warren Spector). Seamus Blackley headed over to Microsoft around the same time to lead the development of the original Xbox. Ken Levine heads up Irrational Games, with his games like BioShock.

The talent spreads and continues to develop!

Here's to the future of the Bluetongue staff, and I look forward to seeing what the various talented people get involved in next!

Murray Lorden
Firemint Game Designer
(and past Bluetongue employee)

Posted:2 years ago

#29

Gregory Yong
UI artist

1 0 0.0
I wouldn't count on the AUS games industry bouncing back until the EURO and USD gain significant strength against the AUD which I'd personally guess at being ~5-10 years.

I've had four jobs in the past 30 months, three being in gaming. There's just no security or guarentee you'll be employed after you ship a game even when I was in Europe. As we've seen even strong studios can be closed down by their publisher overlords at a whim after shipping many profitable games.

There is plenty of work in Europe though with job descriptions coming to me monthly, obviously thats no good to the newly graduated who have no experience to relocate.

Posted:2 years ago

#30

Andrew Ihegbu
Studying Bsc Commercial Music

436 146 0.3
Well to be very honest, the only thing that they've had as a constant moneyspinner is WWE. Companies that make quality games like Bethesda have a minimum of 3 IP's that would sell well just off their rep if they were released tomorrow. (Fallout, Elder Scrolls, Quake)

Even R* now has Red Dead, GTA and Midnight Club... what has THQ got... i wouldn't be surprised if they were on pretty shaky ground for a multi-studio empire with only one successful franchise. And how the hell did they balls up Red Faction, I've got mates still wishing a new one came out since playing the original Xbox title, and news of the new one hasn't even reached them... well informed friends too!

Posted:2 years ago

#31

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